T-Mobile CEO John Legere antagonizes AT&T and Verizon once again in his 2017 Christmas cartoon. Calling Verizon and AT&T’s business practices “bulls**t” in a two-minute cartoon featuring himself, an elf, reindeer and a snowman, Legere recounts how he took out the “misers” AT&T and Verizon that snowed customers with a “blizzard of BS.” Sprint goes unmentioned, which could be a good or bad thing depending on your perspective and its current relevance in the wireless marketplace. (2:11)

Some of America’s top telephone and cable companies will likely pay little, if any federal taxes as a result of the passage of a Republican-sponsored tax cut plan, while some may also receive generous “refunds” based on depreciation-related expenses and future investments the companies would have made with or without changes to the tax code.

For several years in the last decade, companies with significant infrastructure expenses often did not spend a penny in federal taxes thanks to generous loopholes and incentive programs designed to encourage corporations to invest in new equipment, research, and development. The new Republican-sponsored tax cut is expected to provide a windfall of tax savings for every corporation in the country, but telecom companies are expected to do especially well with a combination of a lower corporate tax rate and the GOP’s failure to fulfill a commitment to close many of the tax loopholes and incentives that were originally designed to get companies spending during the Great Recession.

No provider has promised customers lower rates as a result of the billions of additional dollars the companies are expected to keep in the bank starting next year. In fact, there are early signs that much of the anticipated windfall will be returned to shareholders in the form of increased dividend payouts and accelerated share buyback schemes that reduce the number of shares available for sale, boosting both the sale price of the stock and executive bonus compensation tied to the price performance of the stock.

Despite that, companies including AT&T and Comcast are cranking up their PR machines to get on the good side of the Trump Administration, suggesting the new tax cuts will directly benefit middle class employees at both companies.

AT&T’s capex increased $1.1 billion to $11.2 billion for the first six months of 2017 without the tax cut legislation.

AT&T announced it would pay a one-time $1,000 bonus to its workers and invest an additional $1 billion in network upgrades as a direct result of the tax cuts.

However, a closer look reveals AT&T’s commitments to boost compensation came not as a result of the tax cut but instead from nearly a year of hard negotiations with the Communications Workers of America (CWA), one of the biggest unions representing AT&T workers.

The CWA argued that AT&T needed to follow-through on the Republican Party’s promise that passage of the tax cuts would result in higher wages for the middle class.

“Republicans, including the president, said the average household would get $4,000 under this tax plan,” CWA spokesperson Candice Johnson told The Daily Beast. In November, CWA officials began to demand $4,000 raises for AT&T workers promised by the GOP. “This bonus came out of that conversation. It’s a start, and we’re going to keep holding our leaders accountable.”

Instead of $4,000 more a year for AT&T workers as a result of the tax cut bill, the union’s influence achieved a $1,000 one time bonus and an average salary bump of 10.1%. Without pressure from the union, many AT&T employees and union officials believe AT&T would have offered little, if anything to its employees as a result of the tax cut.

AT&T’s Christmas Bonus will cost the company a fraction of the amount it risks losing if its $109 billion merger deal with Time Warner, Inc., does not survive an antitrust review by the Justice Department and the courts. The Justice Department announced its opposition to the merger. The connection between AT&T’s press release, which plays into the Trump Administration’s talking points about the tax cut law, and AT&T’s need for a friendlier response to its merger deal by administration officials, was not lost on Crane’s Chicago Business:

By now, companies have learned the art of crafting the type of upbeat, largely symbolic press releases our president loves, with enough big numbers to get them on the White House’s good side. If this time around that also means some extra money in workers’ pockets, all the better. But some of these announcements come across as more gimmicky than others, and it’s not hard to wonder if there are also other motives at work.

AT&T is angling to overcome regulatory objections to its $109 billion merger with Time Warner Inc. and either way, needs to invest in the U.S. to build out its fiber-optic cable and 5G networks. Analysts estimate AT&T’s net income will be close to $14 billion this year.

AT&T’s commitment to spend up to $1 billion additional dollars next year as a direct result of the tax cut is recycled old news, critics charge, because AT&T previously announced the same $1 billion commitment in early November. Regardless, the extra spending is a small fraction of AT&T’s overall capex budget.

In 2016, at the height of so-called “investment-killing net neutrality,” AT&T exceeded its 2016 capex forecast, spending $22.9 billion — $900,000 more than it expected. In 2017, AT&T announced it expected to spend $22 billion again this year, primarily on its wireless network and wired business solutions. The other major former Baby Bell – Verizon Communications, spent $17.1 billion in 2016 and expected to spend up to $17.5 billion this year.

AT&T’s promise to spend an additional $1 billion is a token amount, especially when considering the tax cut savings likely to be won by phone companies like AT&T and Verizon. From 2008-2015, AT&T paid an effective federal tax rate of just 8.1%, according to the Institute on Taxation and Economic Policy. It will pay considerably less under the Republican tax law, potentially saving the company billions. During the same period, Verizon paid absolutely zero federal taxes during many of those years, and in fact won a refund from the IRS because of network investments and depreciation-related savings. Because the GOP did not close many of the corporate loopholes the politicians initially promised would be ended, many telecom companies could once again pay little, if any federal tax, and may secure hefty refunds.

Source: Institute on Taxation and Economic Policy

Comcast’s $1,000 Christmas Bonus and $50 Billion Spending Commitment

Not to be outdone, Comcast has also promised a $1,000 one time Christmas bonus for its employees as a result of the passage of the GOP tax measure, along with a commitment to spend $50 billion on its business over the next five years:

Based on the passage of tax reform and the FCC’s action on broadband, Brian L. Roberts, chairman and CEO of Comcast NBCUniversal, announced that the company would award special $1,000 bonuses to more than 100,000 eligible frontline and non-executive employees. Roberts also announced that the company expects to spend well in excess of $50 billion over the next five years investing in infrastructure to radically improve and extend our broadband plant and capacity, and our television, film and theme park offerings.

Roberts

Comcast’s spending on its theme parks acquired from NBCUniversal has been especially bullish, with Roberts announcing earlier this year nearly $2 billion in spending  in 2017. In fact, Comcast’s capex spending has trended higher year after year, especially after its acquisition of NBCUniversal. In 2014, the company spent $7.2 billion on capital investments. In 2015, as net neutrality rules took effect, Comcast raised investments to $8.1 billion. In 2016, the capex budget fell slightly to $7.597 billion in 2016, but was forecast to reach $8.445 billion in 2017. Ars Technica reports that from the fourth quarter of 2016 through the third quarter of 2017, Comcast spent $9.4 billion on capital investments.

Much of that spending has been to pay for its X1 set-top box, theme park upgrades, and scaling up its broadband infrastructure to handle faster internet speeds. Earlier in 2017, Comcast also boosted its commitment to spend billions on buying back shares of its own stock, which will benefit shareholders and company executive compensation plans.

As the industry marches towards fiber upgrades and DOCSIS 3.1 deployment, Comcast’s capex forecast without the tax cuts would like come very close to Roberts’ $50 billion estimate over the next five years, assuming the company spent a reasonable average of close to $10 billion annually. Roberts said he “expects” spending at that level, but did not commit to it formally, so there is no penalty for overestimating investment numbers.

AT&T earlier noted predictions about capital investments always relate to actual need at the time and the company doesn’t spend money it does not need to spend.

“There is no reason to expect capital expenditures to increase by the same amount year after year,” AT&T said at the time. “Capital expenditures tend to be ‘lumpy.’ Providers make significant expenditures to upgrade and expand their networks in one year (e.g., perhaps because a new generation of technology has just been introduced), and then focus the next year on signing up customers and integrating those new facilities into their existing networks, and then make additional capital expenditures later, and so on.”

But there are political upsides to making no-strings-attached investment predictions anyway.

Comcast’s share repurchase program also allows the company to boost dividend payouts to shareholders.

Issuing a favorable press release that dovetails with the Trump Administration’s tax cut plan could buy Comcast goodwill from the administration as the company faces calls from Congress to extend merger deal conditions and restrictions on its 2011 acquisition of NBCUniversal. Those conditions are scheduled to expire in September 2018.

Jon Brodkin notes that telecom companies frequently tie their spending plans to regulatory matters going in their favor:

When ISPs are asking the government for a specific policy change—such as the repeal of a regulation or a tax break—they are quick to claim that the desired policy will lead to more investment.

AT&T, for example, announced last month that it would invest “an additional $1 billion” if Congress passes tax reform. With the tax reform now passed by Congress, AT&T said yesterday that it will move ahead with that $1 billion increase.

But neither one of those AT&T announcements said what the exact level of investment would have been if the tax bill wasn’t passed.

And in 2010, AT&T told the FCC that capital expenditures are based on technology upgrade cycles rather than government policy. At the time, AT&T was asking the FCC for a favor—the company wanted a declaration that the wireless market is competitive, a finding that can influence how the FCC regulates wireless carriers.

It is rare for AT&T and Verizon to feud in public, even rarer for one company to accuse the other of being anti-competitive, but that is precisely what happened last week in California as the two companies sparred over building a next generation wireless network for first responders.

The First Responder Network Authority (FirstNet) is a government program to provide emergency responders with priority access to the first nationwide, high-speed wireless broadband network dedicated to public safety. AT&T won an extremely lucrative contract to build, operate and maintain the network in states that “opt in” to AT&T/FirstNet’s proposal. But AT&T is not building a separate wireless network apart from its existing wireless infrastructure. It is using $6.5 billion in public taxpayer dollars and free access to an extremely valuable segment of nationwide 700MHz spectrum, known as Band 14, to improve its existing wireless network for individual customers and the first responders that will get priority access in the event of an emergency.

For AT&T to benefit the most financially, it has to convince each of 56 states and territories to “opt in” to its FirstNet deployment plan or do nothing at all, which will result in that state or territory automatically being enrolled in AT&T’s plan. If a state elects to opt out of AT&T’s plan, the wireless company cannot get free access to Band 14 or collect the taxpayer dollars designated for that area.

FirstNet is one of AT&T’s most lucrative contracts in years, and the phone company is doing everything possible to win over state officials in hopes they will embrace the FirstNet plan. It has been a successful effort with more than 30 states, Puerto Rico and the U.S. Virgin Islands purposely opting in, and more than a dozen still studying AT&T’s offer. To date, no state has opted out.

Verizon, which did not bid on the original FirstNet contract, has not walked away from providing public safety communications and has spent a considerable amount of its advertising budget to promote Verizon’s own services to first responders, designed to assure they get first priority to clogged cellular networks in the event of an emergency. In August, Verizon announced it will privately finance its own “private network core” to directly serve police, fire, ambulance, and related agencies. Verizon’s first responder network will be separate from Verizon’s public network, but the company has also promised full priority access to its public LTE 4G network across the country.

Verizon’s counteroffer comes without taxpayer financing, yet will offer many of the same services as AT&T FirstNet, without costing the country more than $6 billion. Among the services Verizon will give away for free: priority/preemption access, which means in an emergency, first priority will go to emergency officials even if it means dropping your cell phone call or data session. Verizon is also bolstering its Push-to-Talk Plus service, which works with existing land mobile radio networks. This will allow first responders to use the “walkie talkie”-type features already a familiar part of their radio equipment.

Verizon’s offer would seem to be a good deal for consumers and governments in states like New York and California that have yet to opt in to AT&T FirstNet, and in California, Verizon was invited to bid to create an alternative network in a potential “opt out” scenario. Verizon’s director of public-safety solutions group – David Wiederecht, promised the state Verizon would submit its bid by the state deadline, which was last Wednesday. By Friday, California officials leaked word Verizon had reneged on that commitment and did not participate, a fact Verizon later confirmed.

Verizon accused AT&T and FirstNet of colluding to rig the “Request for Proposals” process in California with requirements that were impossible for anyone except AT&T to meet.

“Vigorous competition that allows the industry and the marketplace to continue to grow and innovate is in the best interest of public safety and should be everyone’s shared goal,” Verizon said in a written statement. “Instead, we believe FirstNet and its corporate partner are rigging the game in order to stifle true competition.”

Urgent Communications reported that the among the most onerous requirements imposed by AT&T and FirstNet is that all emergency communications in an “opt out” state must be sent to the FirstNet LTE core network operated by AT&T. That would mean that regardless of who builds and operates the network, AT&T still remains at the core of FirstNet.

“We’re not prepared to have our public safety customers run on a network where we can’t control their ability to connect or their customer experience,” according to the Verizon spokesperson.

Verizon suggests the reason for 36 states to have opted-in to AT&T’s proposal may not be the result of love for AT&T, but rather the punishments the states and territories risk if they don’t sign on with AT&T.

Don Brittingham, Verizon’s vice president of public safety, testified at a Pennsylvania hearing regarding FirstNet and warned states could be effectively stuck with AT&T indefinitely.

“States should not be required to use the network core deployed by (AT&T) FirstNet, as such a requirement would put the state in the untenable position of being driven by the interests and decisions of FirstNet’s commercial partner—a condition that would be unattractive to any prospective state commercial partner,” Brittingham said.

AT&T has also borrowed from its customer preservation policies on the retail side with terms and conditions that could be financially devastating to states that decide to look elsewhere.

Because any competing provider is required to use AT&T’s network core to be a part of FirstNet, AT&T can set whatever price it chooses for third party access. But most onerous of all is the penalty imposed if a state opts out of AT&T FirstNet and chooses a vendor that does not meet every FirstNet guideline. In that case, a state would be required to come hat in hand back to AT&T/FirstNet for service that does meet the guidelines AT&T/FirstNet wrote. In California, that penalty fee would amount to as much as $15 billion, more than twice the amount taxpayers are paying AT&T to build out FirstNet in at least 36 states and territories.

Taken from a FirstNet fact sheet.

AT&T defended the amount of the penalty fee, claiming it has to build or enhance its network to provide public safety communications for at least 25 years, but critics contend the penalty is so risky, most states will opt for the path of least resistance and legal exposure and sign on with AT&T/FirstNet.

Verizon’s complaints about the bidding process received a strong rebuke from AT&T.

“Building a state-of-the art network that meets the needs of first responders is hard. Clearly, AT&T is up for the task,” Chris Sambar, AT&T’s senior vice president for FirstNet, said in a statement provided to Urgent Communications. “We’re noticing a pattern: Verizon says they have public safety’s back, but when it comes to the heavy lifting, they are nowhere to be found.”

But then, neither are any competing providers.

Super monopoly?

Some Wall Street analysts are pondering ideas on how to limit forthcoming 5G wireless home broadband, suggesting providers might want to set up local monopolies, keeping competition to a minimum and profits to a maximum.

Verizon’s presentation at its annual Analyst Day meeting drew little praise from analysts and investors in attendance, “landing like a thud” to quote one person at the event.

The issue concerning Wall Street is what impact 5G wireless broadband will have on the internet access marketplace, which is currently a comfortable monopoly or duopoly in most American cities. That may radically change if the country’s four wireless companies each launch their own 5G services, designed to replace wired home broadband services from the cable and phone companies.

This week Verizon formally announced Sacramento would be the first city in the country to get its forthcoming 5G service, with an additional four of five unnamed cities to follow sometime next year.

Verizon will advertise 1,000Mbps service that will be “priced competitively” with current internet providers in the market. But Verizon intends to market itself as “a premium provider,” which means pricing is likely to be higher than one might expect. Verizon claims they intend to roll out 5G service to 30 million households — 25-30% of the country, making Verizon a prominent provider of fixed wireless home broadband service.

But analysts panned Verizon’s presentation for raising more questions than the company was prepared to answer. Barron’s shared the views of several analysts who were underwhelmed.

Notably, Craig Moffett from Moffett-Nathanson was particularly concerned about how to rate 5G service for his investor clients, and more importantly to them, how to forecast revenue and profit.

Moffett

The biggest problem for Moffett is the prospect of additional competition, and what that will do to each current (and future) provider’s share of customers and its revenue. If every major wireless carrier enters the 5G home broadband business, that will raise the prospective number of ISPs available to consumers to six or more — four wireless carriers competing with the phone and cable company. That is potentially very dangerous to big profits, especially if a competitive price war emerges.

“Let’s assume that AT&T is just as aggressive about this opportunity as Verizon,” Moffett told his investor clients. “Will they enter the same markets as Verizon, or different ones? […] If multiple players enter each market, all targeting the same 25-30% [where 5G service will be sold]. Well, what then? Let’s suppose the 30% market share estimate is right. Wouldn’t it be now shared among two, three, or even four [5G fixed wireless broadband] providers?”

Moffett gently proposes a concept where this profit-bruising competition can be abated by following the cable television model — companies agree to stay out of each others’ markets, giving consumers a choice of just one 5G provider in each city instead of four.

“There’s a completely different future where each operator targets different markets […] Let’s say that AT&T decides to skip Sacramento. After all, Verizon will have gotten there first,” Moffett suggests. “If the required share of the [fixed wireless] market is close to Verizon’s estimated 30%, then there is only room for one provider. So AT&T decides to do Stockton, about 40 miles to the south. Verizon would then skip Stockton, but might do Modesto, twenty miles further south… and then AT&T would then skip Modesto and instead target Fresno… unless Sprint or T-Mobile got there first.”

But Moffett is thinking even further ahead, by suggesting wireless carriers might be able to stop spending billions on building and expanding their competing 4G LTE networks when they could all share a single provider’s network in each city. That idea could work if providers agreed to creating local monopolies.

“That would create a truly bizarre market dynamic that is almost unimaginable today, where each operator ‘owned’ different cities, not just for [5G] but also for 4G LTE. If this kind of patchwork were to come to pass, the only viable solution might then be for companies to reciprocally wholesale their networks. You can use mine in Modesto if I can use yours in Fresno. To state the obvious, there is almost no imaginable path to that kind of an outcome today.”

The reason providers have not attempted this kind of “one provider” model in the past is because former FCC commissioners would have never supported the idea of retiring wireless competition and creating a cable monopoly-like model for wireless service. But things have changed dramatically with the advent of Chairman Ajit Pai, who potentially could be sold on the idea of granting local monopolies on the theory it will “speed 5G deployment” to a large number of different cities. Just as independent wireless providers lease access on the four largest carriers today (MVNO agreements), AT&T, Verizon, T-Mobile and Sprint could sell wholesale access to their networks to each other, allowing massive cost savings, which may or may not be passed on to customers.

But it would also bring an end to network redundancy, create capacity problems, and require every carrier to be certain their networks were interoperable with other wireless companies. The federal government’s emergency first responder program also increasingly depends on a wireless network AT&T is building that would give them first priority access to wireless services. How that would work in a city “designated” to get service from Verizon is unclear.

Restricting competition would protect profits and sharing networks would slash expenses. But such prospects were not enough to assuage Wall Street’s insatiable hunger for maximum profits. That is why analysts were unimpressed with Verizon’s presentation, which “lacked the financials” — precise numbers that explain how much the network will cost, how quickly it will be paid off, and how much revenue it can earn for investors.

A small cell attached to a light pole.

Verizon did sell investors on the idea 5G will put an end to having to wire fiber optics to every home. The service will also keep costs to a minimum by selling retail activation kits customers will install themselves — avoiding expensive truck rolls. Billing and account activation will also be self-service.

Verizon also announced a new compact 4G/5G combined antenna, which means 5G service can be supplied through existing macro/small cell 4G equipment. Verizon will be able to supplement that network by adding new 5G nodes where it becomes necessary.

Investor expectations are that 5G will cost substantially less than fiber to the home service, will not cost massive amounts of new investment dollars to deploy in addition to maintaining existing 4G services, will not substantially undercut existing providers, and will allow Verizon to market 21st century broadband speeds to its customers bypassed for FiOS fiber service. It will also threaten rural phone companies, where customers could easily replace slow speed DSL in favor of what Verizon claims will be “gigabit wireless.”

Despite that, Instinet’s Jeffrey Kvaal was not wowed by Verizon’s look to the future.

“Verizon’s initial fixed wireless implementation seems clunky and it withheld its pricing strategy,” Kvaal told his clients. He believes fixed wireless broadband will cost Verizon an enormous amount of money he feels would be better spent on Verizon’s mobile network. “Verizon glossed over 5-10x LTE upgrades that are already offering ~100Mbps of fully mobile service at current prices to current phones without line of sight. A better 5G story might be to free up sufficient LTE capacity to boost the unlimited cap from 25GB to 100GB for, say, a $25 premium. The ‘cut the cord’ concept was successful in voice, in video, and should be in broadband.”

Pai

FCC Chairman Ajit Pai has gone all out to defend internet service providers and his plan to jettison Net Neutrality, claiming companies like Twitter and other “edge providers” that offer a platform to a diversity of voices are a much bigger threat to an open internet than companies like AT&T and Comcast.

Speaking at the Future of Internet Freedom conference in Washington, Pai faced down the torrent of criticism that has been expressed about his plans to roll back Title II enforcement of ISPs and Net Neutrality rules that protect internet content from discriminatory behavior. In remarks to the audience, Pai used partisan framing to criticize companies like Twitter that he claims have targeted bans on conservative users who violate its terms and conditions and removes tweets for political reasons.

“Now look, I love Twitter, and I use it all the time,” Pai said. “But let’s not kid ourselves; when it comes to an open internet, Twitter is part of the problem. The company has a viewpoint and uses that viewpoint to discriminate. As just one of many examples, two months ago, Twitter blocked Rep. Marsha Blackburn (R-Tenn.) from advertising her Senate campaign launch video because it featured a pro-life message. Before that, during the so-called Day of Action [to preserve Net Neutrality], Twitter warned users that a link to a statement by one company on the topic of internet regulation ‘may be unsafe.’  And to say the least, the company appears to have a double standard when it comes to suspending or de-verifying conservative users’ accounts as opposed to those of liberal users.  This conduct is many things, but it isn’t fighting for an open internet.”

Pai also used additional examples of “edge provider” censorship that he claims targets conservatives far more often than liberals:

• Apple’s app store bars apps from cigar aficionados as promoting tobacco use
• YouTube “restricts videos from the likes of conservative commentator Dennis Prager on subjects he considers ‘important to understanding American values.'”
• Mysterious algorithms target content to specific users but without transparency and disclosure
• Edge providers champion their own free speech while supporting online censorship at the behest of foreign governments for business reasons.

But Pai’s own statements lacked transparency:

1. Twitter blocked, then rescinded its block, on one sponsored Tweet from Blackburn that claimed in the ad she ‘stopped the sale of baby body parts.’ Twitter declared the ad was inflammatory and violated Twitter’s advertising standards. Other media fact-checkers were less polite, calling her claim false advertising. “No investigation ever found proof of actual tissue sales. The only criminal charges stemming from the videos were filed against antiabortion activist David Daleiden and another activist in California for violations of privacy. Yet to this day, ‘baby body parts’ remain a rallying cry in conservative and antiabortion circles,” according to a Washington Post story. Twitter’s advertising standards differ from its general code of user conduct.
2. Apple’s app store does indeed block apps promoting products deemed harmful to users. There is no financial incentive to block these apps, however. The specific language: “Apps that encourage consumption of tobacco products, illegal drugs, or excessive amounts of alcohol are not permitted on the App Store. Apps that encourage minors to consume any of these substances will be rejected. Facilitating the sale of marijuana, tobacco, or controlled substances (except for licensed pharmacies) isn’t allowed.”
3. Pai suggests YouTube is unfairly restricting Mr. Prager’s videos, but in fact it is only placing advisories on some of his more inflammatory content warning the video may not be suitable for some audiences. YouTube also demonetized certain videos, making them ineligible for pre-roll advertisements, primarily because advertisers do not want to be associated with inflammatory content. But no videos have been censored, blocked, or removed. Anyone can view them by acknowledging the content advisory. Members of the LGBTQ community have also been upset with YouTube for similar actions, so there is scant evidence YouTube’s motives are political and target conservatives.
4. Pai’s ‘mysterious algorithms’ have existed across the internet for years, including Verizon’s “super cookie” and AT&T that extracted more money from customers to switch off its monitoring and tracking software following customers’ internet usage. Pai was highly instrumental in blocking internet privacy regulations that would have forced the kind of disclosure of practices he suddenly objects to now.
5. Pai’s claims about American companies caving in to foreign governments’ censorship policies seem to echo his similar 2015 claim that Net Neutrality also helps authoritarian regimes, as long as one interprets Net Neutrality as a “government takeover” of the internet. “If in the United States we adopt regulations that assert more government control over how the internet operates… it becomes a lot more difficult for us to go on the international stage and tell governments: ‘Look, we want you to keep your hands off the internet. Even if the ideas aren’t completely identical, you can appreciate the optical difficult[y] in trying to make that case,” Pai said. But that argument distorts like a fun house mirror. Pai’s declaration that Net Neutrality is a bad thing is based on his premise it would hand the keys to information control to the government to act as gatekeeper. He prefers trusting private companies to be more reliable and safer gatekeepers than the FCC or the Trump Administration. But that argument puts Pai at war with himself, considering his attacks on edge providers — private companies — for bias and censorship. Incidentally and ironically, he raised many of his 2015 objections on RT — the external television service of Russian State Television.

Pai reserved much of his remarks to attack Hollywood celebrities that occasionally inelegantly promote Net Neutrality with inexact language Pai loves to exploit. Among his targets were Mark Ruffalo, who played Hulk, Cher, and George “Sulu” Takei.

Takei

Pai called out Mr. Takei for his suggestion eliminating Net Neutrality would allow internet companies to further monetize the internet by selling additional packages of services to access certain internet content.

“The complaint by Mr. Takei and others doesn’t hold water. They’re arguing that if the plan is adopted, Internet Service Providers would suddenly start doing something that Net Neutrality rules already allow them to do. But the reason that Internet service providers aren’t offering such packages now, and likely won’t offer such packages in the future, is that American consumers by and large don’t want them.”

But of course that didn’t prevent ISPs like Comcast and AT&T to impose data caps on their customers with scant evidence of their necessity and with purely arbitrary allowances. From this regime of data caps, Wall Street analysts push providers to further monetize internet usage to raise revenue to return to shareholders. What customers want has not had much impact on Comcast’s business decisions, as the record on data caps illustrates. The threat of regulation like Net Neutrality enforcement has cooled enthusiasm for these pricing schemes, however, until recently. In April, after Mr. Pai introduced his Net Neutrality repeal plan, Comcast quietly repealed its self-ban on paid prioritization — internet fast lanes.

In a barely competitive marketplace, what customers want may not count for much if they have few, if any alternatives.

Chip Pickering, CEO of INCOMPAS, which includes as member major Silicon Valley edge providers, called Pai’s speech a diversion from the real issues.

“Chairman Pai’s attack on Twitter is like a boxer losing a fight and taking wild and erratic swings,” Pickering said. “Preventing hate speech and bullying behavior online is not the same thing as allowing cable companies to block, throttle and extort money from consumers and the websites they love. Twitter is an amazing platform for left, right and center. Donald Trump might not be President without it, and Chairman Pai’s plan to kill Net Neutrality will put Comcast and AT&T in charge of his Twitter account.”